Imagine a phenomenon like Bernie Madoff in high heels. Every decade has its share of elephantine scandals, but not many involve women. Like moths drawn to a flame, we are attracted to their stories, machinations and motivations.
Speaking of motivation, who believes that Madoff started as a legit broker, then fell into the abyss a crack at a time? Let’s also remember Frank Abagnale, the “Catch Me if You Can” genius thief who ended up working for the government.
Another bright, charming mastermind, Stanford University dropout Elizabeth Holmes’ spiral down the rabbit hole of misleading investors is detailed in Pulitzer Prize-winning reporter John Carreyrou’s book “Bad Blood: Secrets and Lies in a Silicon Valley Startup.” Carreyrou will appear at the Marcus JCC’s Page from the Book Festival Feb. 4.
In the frenzied culture of throwing money at Silicon Valley, Holmes started from the base of having former Secretary of State George Shultz on the board and raised billions from savvy investors chasing the pot of gold and maybe hoping to help save lives through the company she started, Theranos.
The book devolves to “truth is stranger than fiction” as Carreyrou describes Holmes’ affectations in the black turtleneck garb and deep voice of a Steve Job-like character as she misleads retail partners such as Walgreen’s into flawed attempts to provide precious medical information via a simple blood test for which she did not have the technology. Along the way, she has a “liaison” with her partner and presides over a secretive and poisoned work culture.
Carreyrou shines as The Wall Street Journal reporter whose inquiries and articles brought down Theranos’ biotech start up cum house of cards. Or shall we say, “theatre of misplaced tubes and vials”?
In one interesting scene, Carreyrou describes a Theranos facility visit from then Vice President Joe Biden who praised it as “the laboratory of the future,” which was actually a fake staged setup.
“Bad Blood” is a must-read as the gripping story of one of the biggest corporate frauds since Enron. It’s the scam of the decade carried over to the new decade with the trial set for July. It ain’t over yet!
The AJT spoke with Carreyrou:
AJT: You are known for your expertise in financial journalism. How would you compare the Theranos fraud versus other scandals?
JC: It was especially brazen, but that makes sense in the context of Silicon Valley circa 2014-15. There were no checks and balances on the private tech startups that were proliferating. No analysts or public investors to scrutinize public filings and ask tough questions; no history of regulation or even law enforcement in Silicon Valley; a culture that turned rule-breaking into a virtue; and hundreds of millions of dollars available to those who made a good pitch.
AJT: What are your forethoughts about the July 2020 trial and the potential of Holmes serving prison time?
JC: I think it’s going to be a pivotal, precedent-setting case for Silicon Valley. If Holmes is convicted and has to serve time in prison, it will be a wake-up call to Valley entrepreneurs that if you take things too far, you’ll be punished. It will signal the end of the anything-goes-in-the-name-of-innovation era. If, on the other hand, she’s acquitted, it will have the opposite effect: young Valley entrepreneurs inclined to push the envelope will say, “See, even Holmes got away with what she did. I don’t have anything to worry about.”
AJT: Have you had any particularly targeted feedback from Silicon Valley?
JC: A lot of people from Silicon Valley have told me they loved the book. In terms of the impact on behaviors out there, I hear mixed things. Some entrepreneurs and VCs argue that Theranos was an outlier and not representative of Silicon Valley as a whole, so there are no lessons to be learned from it. I obviously don’t agree with that point of view.
AJT: Is she now funding a new startup?
JC: I’m told she was exploring the launch of a new startup in the spring of 2018, but that ended when she was indicted in June 2018, three weeks after “Bad Blood” was published in hardcover. As far as I know, she’s living in San Francisco and preparing with her attorneys for this summer’s trial.
Carreyrou will appear and autograph his book at 7:30 p.m. Feb. 4 at the Marcus JCC as A Page from the Book Festival, which brings a prestigious array of authors to the Atlanta community throughout the year. Member tickets are $15, $20 for the community, or $32, which includes a paperback copy of the book.